Negotiation Meets Sustainability: I have been exploring the theme of how effective negotiation is compatible with a mindset of sustainability, and not focused on simply price and cost. The proliferation of Impact Investing is a clear sign that having a purpose to do good and not just make profit is the way forward, and those businesses who do not embrace this, will not survive. The data on financial performance supports this. One study by the Investment Bank, Fidelity, who analyzed 2,660 firms, showed that companies with better Environmental, Social and Governance (ESG) ratings outperformed their peers in every month of 2020.
Good quality negotiation helps to build sustainable businesses, throughout the supply chain, and I wanted to share an example. One of my favourite clients was a company we all know. It wasn’t simply because we had a large, very profitably multi-year contract, which was strategically important to both parties, that made them such a good client. We worked hard at having the fundamentals in place, starting with trust. It was because of how we worked together, in true partnership. And when it came to negotiating, there was no ego in the room. It’s worth remembering that negotiation is something we do with someone, not to someone.
Every time we met, we negotiated through difficult situations to find the solution that was the best for everyone, and the result was our workforce benefited, the client could serve their clients better, every member of the supply chain was considered and supported, the profit we made was what we needed, and genuinely the end product made the world a slightly safer place than before. And we didn’t compromise on quality in any aspect – of the product, of the value, of the supply chain, of the experience for the end user.
How did we do this?
1. We took our time to understand each other’s needs, what was on our “sheets of paper”. We would have multiple meetings and calls to give us the chance to explore every avenue of possibility.
2. This allowed us to get creative. Every time we negotiated we came up with new ideas that would help. Early on, we asked for a case study and a client reference. This had enormous value for us, as they had such a good brand and the solution we provided was highly innovative, so we could take it to other prospective clients.
3. We grew the pie. They asked for a technical change that we initially thought was impossible for us to do and there was a risk that they would go and find someone else to do it for them, but our Innovation Team worked out a solution and now had a whole new feature to our product we didn’t think we could do, and our customer was delighted.
4. We always said “Yes, if…” or “No, but…”. . This technique and habit is one of the fundamental skills we teach at TableForce. If you say yes to something, always ask for something in return. And being comfortable saying “no”, while offering an alternative, helps find new opportunities and explore new possibilities, and in this case with this client led to setting up a new factory in a new country which generated jobs, helped the local community and further cemented our long term relationship.
When we get negotiations right, both sides can make profit and we do good for the planet and the people at the same time. Negotiation meets sustainability, in action!